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Analysts from broker Kilik said: ‘Lloyds has made significant progress to returning to a normalised position and now offers the cleanest play on the UK banking sector.’

Shares jumped 5.5 per cent to 79.5p, adding £3billion to Lloyds’ market value on Thursday. They rose again slightly today, up 0.78 per cent at 80.12p by mid-morning.

Lloyds shares reached a recent high at 86.3p in mid-January, but remain a fraction of the 600p-plus price seen before the financial crisis and ill-fated arranged marriage with Halifax Bank of Scotland.

Chief executive Antonio Horta Osorio said: ‘Our simple, UK-focused, low-risk and low-cost model is founded on creating value for customers and helping Britain prosper, and is well positioned to support and benefit from continued recovery in the UK economy to make further progress in the remainder of 2014’.

The bank confirmed plans to float spin-off TSB on the stock market this summer, and is hoping to offload a minimum stake of 25 per cent by the end of June.

It was forced to sell 632 branches by the European Commission as a condition of receiving a £20.5billion bailout during the financial crisis.

But it has been hit with a £1.64billion bill to launch TSB by itself, after the Co-op was last year forced to pull out of a deal to buy the branches when a £1.5billion black hole emerged in its finances.

Lloyds has lined up six investment banks, including Citigroup and JPMorgan, to work on the deal. A minimum of 25 per cent of TSB – which is valued at around £1.5billion by analysts – is set to be floated in the first offering. This is expected to be open to retail investors.

The bank raised hopes that it would be able to resume paying dividends.

Analysts predict it will announce a full-year award for long-suffering investors in May next year.Lloyds’ statutory pre-tax profit fell by a third to £1.37billion.

But this masked the progress of the lender, as last year it had been boosted by huge gains made from the sale of a stake in wealth manager St James’s Place and the sale of government bonds.